Debt lower here than in most areas

June 21, 2014|By Donna Gehrke-White, Sun Sentinel

South Floridians are taking on more debt as the economy improves, but they still have less than people in most metropolitan areas, a new survey found.

The average debt of $24,884 per person in Broward, Palm Beach and Miami-Dade counties in February 2014 is the third-lowest of the 20 largest metro areas in the United States, according to the survey by Experian, one of the nation's three largest credit reporting agencies.

South Floridians' balances on credit cards, car loans, student debt and personal loans went up an average of 2.6 percent — or $626 — in the five years from 2010 to 2014, the study found.

In contrast, people in the Dallas area racked up 8 percent more debt during that time, for an average balance of $28,240 per person, the highest of the communities surveyed. Houston wasn't far behind with an average of $28,105 per person, up 11 percent in five years.

"The economy is [improving] in Texas," said Rod Griffin, Experian's director of public education who is based in Dallas.. "That makes it easier for people in Texas to borrow more."

Experian looked at 750,000 credit histories across the country. Only people in the Detroit and Los Angeles areas kept their personal debt, on average, lower than South Floridians, the survey found. Metro Detroit residents actually whittled their average debt down 7 percent in five years, from $25,409 to $23,604, the only community in the survey to owe less in 2014, Experian reported.

"Many households in South Florida are still grappling with stagnant incomes, and as a result increases in lifestyle and the borrowing that fund that have been constrained," said Greg McBride, chief financial analyst Bankrate.com, a personal finance website based in North Palm Beach.

Now many South Floridians are limiting their borrowing to either buying a car or attending college, McBride said.

"Consumer appetite for auto loans has certainly picked up in the past 12 to 18 months, but consumers remain very risk averse about adding credit card debt," he said in an email. "Car loans and student loans have been the predominant areas of growth in consumer borrowing."

Many South Floridians are eager to attend seminars to learn how they can avoid debt, especially while attending college, said Alysha Klein, who gives free budgeting talks as the Young and Free "spokester" for Miramar-based Tropical Financial Credit Union. "They're staying away from credit cards," she said.

In Coconut Creek, Jonathan Donnelly ended up with about $17,000 in student loans after graduating from Florida State University. Now teaching history at Monarch High School, he borrowed to buy a used Ford Fusion only as a last resort.

"Had my old car not died on me, I'd still be driving it. I'm very frugal about expenses," he said, adding, "I'm trying to save every nickel."

Donnelly said he only recently got his first credit card.

His girlfriend, Kelsey Dean, who works at a Plantation public relations firm, said she is trying to be just as careful. She just applied for her first credit card — which she vows to pay off each month.

Dean said she worked through college so she wouldn't have to take out student loans. She paid her parents back after they took out a loan to buy her a Honda Civic.

"I guess I was so afraid to borrow because of the horror stories," Dean said.